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VOL. 124 | NO. 147 | Wednesday, July 29, 2009

Daily Digest

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Cordova Warehouse Sold Following Foreclosure

The 111,280-square-foot warehouse at 9525 Macon Road in Cordova was sold back to the lender, M&F Business Credit Inc., for $1.9 million following a foreclosure of the property. It sold on the steps of the Shelby County Courthouse July 20 with William P. Moss III acting as substitute trustee.

The previous owner was Big Orange Development Partners, Dudley P. Schaefer Sr. and Joan W. Schaefer. Big Orange Development – whose partners on the original loan were Dudley P. Schaefer Sr., Scott W. Schaefer, David B. Schaefer and Paul O. Schaefer – and the other owners defaulted on a $7.6 million loan through M&F Business Credit dated Oct. 31, 2007.

Home to Schaefer Sash and Door Co., the Class C warehouse was built in 1985 and sits on 5.14 acres on the south side of Macon Road near the intersection with Big Orange Road. The Shelby County Assessor of Property’s 2009 appraisal is $2.8 million.

Source: The Daily News Online & Chandler Reports

Smith & Nephew Sues Former Employee

Smith & Nephew Inc. is suing Trevor Larson, a former salesman, for allegedly violating a non-compete contract and also suing Osteologic Inc., the company that now employs him, according to The Daily News Online, www.memphisdailynews.com.

Larson worked for Smith & Nephew’s Memphis-based orthopedics division, covering a sales territory in Minnesota and Wisconsin from April 2003 until last month when he resigned to take the job at Osteologic, a distributor for Stryker Corp., according to a complaint filed Friday in Shelby County Circuit Court. Stryker is a direct competitor of Smith & Nephew.

Smith & Nephew contends Osteologic knew about the non-compete clause in Larson’s contract when the company hired him. Smith & Nephew is seeking compensatory damages of not less than $1 million and punitive damages of not less than $5 million.

The complaint filed by the plaintiff only gives one side of a legal dispute. The defendants have not yet filed responses to the allegations made by Smith & Nephew.

State Gets $21.5M for Police; Memphis Receives $6.3M

The state is getting $21.5 million in federal grants to help keep police officers on the street.

Nineteen police departments are sharing the money, led by Metro Nashville’s $8.6 million. Jellico got the least, $103,740, but police departments in Knoxville and Chattanooga got nothing.

Memphis got the second highest amount, $6.3 million, and Jackson was third at $1.5 million.

Other police departments and their grants include:

Alcoa, $305,328; Bolivar, $140,877; Bristol, $171,297; Brownsville, $111,762; Cleveland, $642,284; Columbia, $443,052; Dyersburg, $365,949; East Ridge, $316,432; Humboldt, $135,148; Kingsport, $939,012; LaFollette, $133,907; Lawrenceburg, $281,242; Lexington, $167,493; Manchester, $361,284; and Ripley, $319,764.

Tenet Raises 2009 Outlook But Expects Q2 Loss

Hospital operator Tenet Healthcare Corp. – parent company of Saint Francis Hospitals in Memphis and Bartlett – said Tuesday it expects to report a $15 million loss for the second quarter, as bad debt rose and private insurance admissions fell.

But the Dallas-based company also said it saw several reasons, including rising outpatient volume, to raise its 2009 profit outlook range by $50 million.

Tenet said its second-quarter loss, which amounts to 3 cents per share, will match its performance from the same quarter in 2008. Adjusted earnings before interest, taxes, depreciation and amortization, and excluding about $30 million in one-time items such as litigation costs, will be $246 million.

Revenue rose 4.5 percent to $2.2 billion.

Analysts polled by Thomson Reuters expect, on average, a loss of 3 cents per share for the quarter on $2.22 billion in revenue. Analysts generally exclude one-time items from their estimates.

Tenet did not release a per-share figure for its adjusted earnings.

The hospital operator said in a statement it decided to raise its full-year outlook based on what it has earned already this year and on cost control and strengthening outpatient totals. It said those factors can help blunt the impact from soft commercial admissions and rising bad debt, which Tenet attributed to the economy. Tenet reported an adjusted profit of $524 million in the first half of 2009.

Tenet said it now expects full-year adjusted earnings to be between $810 million and $875 million, up from a previous range of $760 million to $825 million.

Analysts expect a loss of 3 cents per share for the year. The company did not provide a per-share outlook.

Consumer Confidence Falls Further in July

Americans’ confidence in the economy eroded further in July as worries about job security offset any enthusiasm about the resumed stock market rally that has helped bolster retirement accounts.

The souring outlook presents yet another obstacle for stores’ critical back-to-school season.

The New York-based Conference Board reported Tuesday its Consumer Confidence Index, which retreated last month, fell to 46.6, down from 49.3 in June. Economists surveyed by Thomson Reuters were expecting a reading of 49. It would take a reading above 90 to signal that the economy is on solid footing.

The second straight month of decline follows an upswing in confidence this past spring fueled by a stock market rally and some signs the economy was improving.

Americans’ lack of confidence presents a big hurdle for retailers and other businesses because consumer spending accounts for more than 70 percent of economic activity.

“Consumer confidence is a reality check for folks,” said Mark Vitner, senior economist at Wells Fargo. “Even though we have seen an improvement in economic indicators, there hasn’t been any meaningful improvement in household finances. Consumers are not in the position to step up their spending in a major way. This doesn’t bode well for the back-to-school season.”

Both components of the consumer confidence gauge fell this month. The Present Situation Index, which measures shoppers’ current assessment of the economy, declined to 23.4 from 25.0 last month. The Expectations Index, which measures shoppers’ outlook over the next six months, fell to 62 from 65.5 in June.

“Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.

She noted that the decline in the Present Situation Index was caused primarily by a worsening job market.

Rhodes Leadership Institute Accepting Enrollment

The Institute for Effective Leadership at Rhodes College is accepting enrollments for its eight-month program that uses classic literary works to teach leadership strategies.

The course material will range from Machiavelli’s “The Prince” and Martin Luther King Jr.’s “Letter from Birmingham Jail” to Malcolm Gladwell’s “The Tipping Point” and Arthur Miller’s “All My Songs” as well as speeches by Henry VIII and Elizabeth I.

Rhodes professors will lead discussions. Steven Priddy, retired vice president of human resources at FedEx Corp., is the institute’s business facilitator and will help the class tie together its readings with leadership theory.

Participants will meet from 8 a.m. to noon on the third Wednesday from October to May.

Enrollment is limited to 25 and preference will be given to early applicants. For more information, call 843-3965 or e-mail whittaker@rhodes.edu.

Baseball Championship Commits to Memphis

Starting next month, Memphis will be the host city for the New Era National Youth Baseball Championships for four years. Major Youth Baseball Alliance (MYBA) stages the event.

The youth championship will be held at Gameday Baseball’s First Tennessee Fields in Cordova. Ten of the games will be televised nationally by MLB Network.

The MYBA is a newly formed company comprised of eight major youth organizations, including the American Amateur Baseball Congress, the Amateur Athletic Union of the United States, Babe Ruth Baseball, Dixie Youth Baseball, National Amateur Baseball Federation, PONY Baseball, Super Series Baseball of America and the United States Specialty Sports Association.

PROPERTY SALES 50 226 2,557
MORTGAGES 44 145 1,731
BUILDING PERMITS 204 569 5,701